Florida Factoring Companies

Florida Factoring Companies Help with Cash Flow


More and more businesses are opting to transfer their unpaid invoices, or accounts receivable, to factoring companies. In turn, they get 70 to 85 percent of the face value of the invoice, dependent upon the due date, within a fast turnaround time.  Then most of the rest, when the invoice is paid.

Factoring is an easier process and provides faster funding than traditional loans. Factoring also saves time at your place of business. Florida factoring companies can help your business free up cash flow to pay its regular expenses on time. Cash flow is needed to maintain inventory, meet payroll, pay utilities, and pay for rent or mortgage costs.

Factoring is available for virtually any and all businesses. Some factoring companies specialize in only a particular industry or two while other factoring companies are willing to help finance any industry. However, it is wise to choose a factoring company that is experienced in your particular field.

Things to Consider When Selecting a Florida Factoring Company

When choosing a factoring company, ask them how your customers will be notified they are taking over the accounts. You want to keep your customers, so you want them to deal with your customers in a friendly and professional manner so your customers remain your customers.

Another thing to inquire about is the collections process. How long does an invoice have to be past due before the collections process begins? How aggressive is the factoring company when pursuing collections? What actions are they willing to take in order to collect on an account?

How experienced are they in customer service? Remember, the factoring company’s customer skills will reflect on your company because they are dealing with customers who purchase from your business. The factoring company provides fast cash now, but you need to retain that customer to keep cash flow in the future.

Florida Factoring Companies From the Financial Standpoint

Looking at factoring from a financial standpoint, it can be considered as an expensive form of credit. It does cost, on average, 15 percent of the invoice value, but you do get paid much faster than you would otherwise. Also you don’t have to handle billing or collecting because the factoring company handles the finances from the third party standpoint.Florida Factoring Companies

Also talk with your factoring company about unpaid invoices. Florida factoring companies have different policies as well as different rates. Some factoring companies eat the loss if an invoice has to be written off for non payment while other factoring companies come back to the original owner of the debt for credit for the bad debt.

It also doesn’t hurt to check with your factoring company about rates. For example, new customers may get 75 percent of the face value of accounts receivable, however, if you stay with this factoring company for the long term, they may be able to offer you more money or better rates. For example, after a year of doing business with the same Florida factoring company, you may be able to get 85 percent of the face value up front.

Consider the Options

Consider how much time you have to spend trying to acquire cash and when you need cash. Is the factoring company option the best for you? It is an expensive form of credit, but you get the money much faster, you don’t have to spend time and manpower billing or collecting debts, and you can focus on taking care of business. Contact local Florida factoring companies to see how they can help your business stay focused on its products and services. Factoring makes sure you have cash readily available for your operations.